Einhorn Recommends Selling Green Mountain Short

Hedge fund manager David Einhorn recommended short-selling Green Mountain Coffee Roasters Inc., the maker of Keurig single-serving coffee brewers, saying competition will increase.

Einhorn, head of Greenlight Capital Inc., also said at the Value Investing Congress in New York today that Green Mountain’s capital expenditures remain inexplicable.

Einhorn has criticized Green Mountain since at least October 2011, when he said the company needs to improve its disclosure and had a “litany of accounting questions.”

Short selling refers to the practice of borrowing stock and selling it, with the goal of profiting by repurchasing the shares later at a lower price.

The shares rose 0.5 percent to $23.43 at 11:05 a.m. after earlier dropping as much as 5.6 percent. The Waterbury, Vermont- based company had declined 48 percent this year through yesterday.

To contact the reporter on this story: Kevin Orland in Chicago at korland@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net